Kleist Comments

MORNING GRAINS 8/26/13

Posted on August 27, 2013 by Dani Schwebach

Corn:

Exports: So Korea cxl’s 60,000t but in for 600,000t for Feb. ship.

Comments: Asian report still has corn offered discount to wheat and corn being gobbled up; crop tour ylds. 154.1/bu. vs. USDA’s 154.4/bu.; “blocking ridge” heats up Midwest next few days; open interest fell 9,500 led by Sept. off 11,600 amid light volume; chart ‘breakout’ on electronic, likely bull defense a close under gap at $4.79-4.74-1/2 for now; I hate weather markets generally but a reason why I use put buying when one is in force…logic, risk means little; C-O-T report: leaned negatively but likely cannot use it yet; will $5.00 December corn attract more hedges? Is the crop burned this badly?

SOYBEANS:

Exports: None Visible.

Comments: OK, “dome of doom” in force with heat advisories from Minn. to Ill. and best chance of rains Wed/Thursday?; India’s crop largely OK as is China’s crop overall (in my readings); Malaysian Palm oil exports up 7.5% on week on demand vs. soyoil; crop tour yld. 41.8bu./acre vs. USDA’s 42.6bu.; unusual situation for the beans with BOTH supply slippage and very good physical demand with no old crop around except for rallies like this; charts post a major upside breakout, leaves a gap at $13.48-$13.31-1/2; open interest rose 4,600 under moderate volume; C-O-T report: leaned significantly bearish but need to give it a cautionary tone for now; like the corn my only ‘conservative logic’ is buying puts in the beans….don’t need a 50-cent risk. But averaged in $13.80-13.90’s time to add to the long puts for the November.

Wheat:

Exports: So. Korea cxl’s 60,000t; Egypt buys 720,000t opt/org.

Comments: As per the Asian report, corn prices have not rallied enough to return buyer to feed wheat; China spring wheat reported too wet; ope4n interest fell 5,350 led by Sept. off 11,600 amid light-side volume (open interest totals last week or so keeps indicating shortcovering and/or liquidation….just net position leaving— to corn or beans perhaps?); C-O-T report: leaned slightly bullish. It’s almost like we are trading ‘mini-corn’ in a ‘full wheat’ contract.

Kleist Comments

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